Compliance Startup Scandal... Is Delve Guilty? | E2266

This Week In Startups is made possible by: Northwest Registered Agent - https://northwestregisteredagent.com/twist LinkedIn Jobs - https://linkedIn.com/twist Sentry - https://sentry.io/twist Plaud - http://Plaud.ai/twist Ro.co - http://Ro.co/Twist Today's show: Hustle Fund general partner Elizabeth Yin joined Jason and Alex to discuss how rapid advances in AI have changed the venture capital game, and how the same AI updates are changing how founders build. Founders may need less capital than before, which could reduce their reliance on venture dollars over time. Ceel founder Ryan Mahdavi joined next to help Jason and Alex dig into the Delve story. Well-funded Delve was publicly criticized for allegedly overselling their compliance tool's capabilities and not being honest with customers. Delve has responded to the allegations, though Mahdavi said that he had his doubts about the competing startup even before the news story broke. Next, TWiST invited Brick founder Seg Sheng on to explain his startup's plan to use a combination of physical hardware and artificial intelligence to help buildings and data centers reduce their energy bills. Given how much juice the AI era demands, Brick could be onto something big. And to close out the show, Gavin Zaentz and Pranav Ramesh from LeadPoet (Bittensor Subnet 71) to show off their technology (the pair put in motion a lead hunt for Brick while on-air). It's a packed show with something for everyone. Let's go! Timestamps: 0:00 Intro 1:18 Plaud: If your work depends on conversations — interviews, meetings, calls — you need a Plaud NotePin. You can check it out at https://Plaud.ai/twist and use code TWIST for 10% off! 3:45 Elizabeth Yin from Hustle Fund on how AI tools have changed her workflow 9:21 How founders use AI to learn how to suck less 10:34 Sentry - New users can get $240 in free credits when they go to https://sentry.io/twist and use the code TWIST 13:17 Ryan Mahdavi from Ceel joins to explain the Delve SOC 2 scandal 18:39 Is Silicon Valley's "bend the rules" culture at fault? 20:38 Red and pink flags, and how investors can spot potential fraud 21:41 LinkedIn Jobs - Hire right, the first time. Post your first job and get $100 off towards your job post at https://LinkedIn.com/twist 23:45 How to not do securities fraud: a simple guide 26:50 Ryan asks: How did the company get through diligence? 31:03 Northwest Registered Agent — Get more when you start your business with Northwest. In 10 clicks and 10 minutes, you can form your company and walk away with a real business identity — Learn more at https://northwestregisteredagent.com/twist 32:25 Were there early warning signs about issues with Delve? 33:26 On Delve's use of tactical donuts 36:55 What about the Delve board? If there is one? 45:24 Seb Sheng stops by to tell us about how Brick Data saves companies massively on energy costs 49:38 Who are Brick's customers and how much are they paying? 54:16 Lightning Round: A quick history of Brick 56:02 Why Jason is so bullish on $TAO 56:45 Ro.co: Ro's insurance checker will let you know if your coverage includes GLP-1s for FREE. Go to https://Ro.co/Twist for your free insurance check. 1:06:35 How do LeadPoet's "miners" track down the best leads? 1:13:09 How Bittensor subnets map to traditional startup forms 1:17:15 How can agents build up authority if they can't get hired for their first job? 1:21:03 Jason: "I think the game of Bitcoin has ended…" 1:23:22 Why Jason likes to place a bet, then learn 1:24:16 The inherent risks in crypto investment Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Check out Jason's suite of newsletters: https://substack.com/@calacanis

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Jason Calacanis?

  All right, everybody. Welcome back to This Week in Startups. Yes, it's your boy Jake Howe. I'm here with Alex Wilhelm, the one and the only.

• 0:09Speaker 01

  This Week in Startups is brought to you by Northwest Registered Agent. Get more when you start your business with Northwest. In 10 clicks in 10 minutes, you can form your company and walk away with a real business identity. Learn more at northwestregisteredagent.com/twist. LinkedIn Jobs. Hire right the first time. Post your first job and get $100 off towards your job post at LinkedIn.com/twist. And Sentry. Your team should be focused on shipping features, not chasing down bugs. New users can get $240 in free credits when they go to sentry.io/twist and use the code TWIST.

• 0:50Jason Calacanis?

  As you can see, teardrop behind me if you're watching us on YouTube. Ski season over. I'm shutting the house down in Tahoe and I do two days of skiing, so I hit 30 for the season. I'll do one half day tomorrow in the slush. A lot of people have been asking me about my tweets about Tao and my fascination with Tao and Steelcore Capital and everything. We're going to talk about Tao at the end of the show, right in the back third. Why I am a bit obsessed with Tao. And as you know, I'm obsessed with a lot of technologies, including my Plaud pin. It's time for us to applaud. Golf clap. Plaud. As you can see here, I have it on my t-shirt. How did I get it on my t-shirt? I didn't use the clip you usually

• 1:34Jason Calacanis?

  see me use when I'm wearing a suit. Well, I'm in Tahoe, so I'm not suited up. It has a magnetic one, so you can put it right behind you. Then, Alex, I got you on the plaud train. I'm recording my plaud right now. So if I have any ideas, like, hmm, I should go to the emergency room and get my pinky, which I dislocated playing basketball yesterday, and make sure I send a note, I can do that. And you just flash your plaud, Alex. You're using the attachment that lets you wear it like a wristband, which is kind of cool, too. It's totally privacy first because you have a button, you press it, the red light goes on. Everybody knows what you're doing. And for meetings, it's amazing. People say, well, why wouldn't you just use your phone?

• 2:20Jason Calacanis?

  Getting your phone out, opening an app, starting it, closing it. Okay, all that's great. It's gonna take you 30 seconds, a minute. Whereas here, you just press the button. One second or less, and you're recording. And it's got multiple microphones on it. And the battery lasts forever. And if your phone's in your bag or your jacket, and you're skiing, but you want to leave it on like a lunatic all day, Alex, I just leave it on when I'm skiing. And I just talk to myself when I'm skiing alone. And, you know, if I ever go down in a tree well or whatever, it'll be my last will and testament.

• 2:54Speaker 01

  Didn't we just talk about you not skiing alone anymore, like 10 days ago? It wasn't that far back, man.

• 2:59Jason Calacanis?

  We have a promo code. People can get a good deal, I think, on Applaud, yeah?

• 3:02Speaker 01

  If you go to P L A U D dot A I, plant dot A I slash twist, use the code TWIST, save 10%. Jason, I'm using my anti-tick ideas for blog posts when I'm out and about. Love it. And because I have the wristband, my children can't yank it off my body. So not really a clip-on guy yet, but give me like five years to have older children and then I'll be able to, you know, safely wear it like that. But yeah, I'm loving it. Lon's loving it. You're loving it. Kind of a hit here at Twist HQ.

• 3:28Jason Calacanis?

  Everybody's loving it. And thank you to them for supporting the program. If you use that URL, they know we sent you. And tell your friends about it. Shout it out on your social medias. Big show today. Got a couple of great guests. Why don't we get started, Alex?

• 3:41Speaker 01

  We have Elizabeth Yen from Hustle Fund. If you don't know Hustle Fund, it is one of those venture capital firms that actually will invest in you very, very, very early. Or as they put it, they invest in hilariously early startups. Think Foundry University, if you will, Jason, people with an idea, but not yet product market fit or anything that far along. I love their fund. I know her co-partner Eric, and they're just some of the nicest people in the entire world. Elizabeth, welcome to the show.

• 4:08Speaker 02

  Thank you. Thanks, guys.

• 4:09Jason Calacanis?

  It's been a while. It's been a minute. So good to see you. How has this AI revolution in the last two years or so impacted what you and I do, which I call now year zero investing? From the front lines, how is it changing? How startups are created? Who's creating them? How fast they grow? Product market fit? Whatever. And maybe even how you run your firm.

• 4:33Speaker 02

  Oh, my gosh. It's been crazy. Well, first off, my own workflow has changed. Like, on my computer over here, which you can't see, I have multiple terminals going, Claude coding away, press 111. And, you know, just playing with all the tools and using them a lot. Open Claw, Claude Cowork, Claude Code, like, etc. So internally, we built a lot more to help us, you know, run our operations. But I think that also has informed a lot of our investment decisions as well. Right? Like, everybody can be spinning up these apps over a weekend. And so now, A, the amount of capital you need for software has gone down dramatically. So there's this question of, you know, why do people even need us? That's the existential question. But, I mean, we have noticed, actually, companies get faster growth, and so they need to pay for their compute bills.

• 5:18Speaker 02

  So we're still needed on that level. I don't know if you've ever seen your own Claude bill or mine, but like, there's money that is needed.

• 5:26Jason Calacanis?

  What are you up to? What was the biggest day slash month you've had? Have you had $1,000 a month?

• 5:31Speaker 02

  Not quite there, but getting there. Yeah.

• 5:33Jason Calacanis?

  Yeah, so 700 bucks a month. You've had a $200 a day?

• 5:37Speaker 02

  We'll probably cross that this month in March, over 1,000. Yeah. Yeah. And I just wrote my CFO note. Like, it'll probably be more than 3,000 by the end of the year, per month.

• 5:49Jason Calacanis?

  Yeah.

• 5:50Speaker 02

  Crazy.

• 5:50Jason Calacanis?

  It is nuts. And I share, too, your observation here. You have to ask, well, what is the role of venture capital? And people have been saying that for a long time.

• 6:01Speaker 02

  Sure.

• 6:02Jason Calacanis?

  It does seem like, you know, the cloud computing revolution, the WeWork revolution, getting rid of those big ticket items, Alex, that we used to negotiate 100,000, 200,000 for the lease of your office, to your commitment. You know, it used to stand up 20 years ago, your own rack of servers in a co-location facility. So that was 100K in servers, probably 50, 100K plus 10,000 a month, 5,000 a month. Plus, you needed a sys admin to do all that work. All that got abstracted away. Okay, GitHub, you know, Digital Ocean, AWS, whatever, you know, you're going to use. But now this is different because those two or three first developers you're going to hire, maybe,

• 6:45Jason Calacanis?

  okay, yeah, maybe we don't, maybe we hire one, but we don't.

• 6:48Speaker 02

  Yeah, you don't need them, at least not in the beginning.

• 6:50Jason Calacanis?

  Right. So that's a big sea change.

• 6:53Speaker 02

  And then what is the moat? That's the other question everyone's asking, right? So it's like, okay, you back this company, they're doing well, but I, you know, I've had a couple of companies, Jason, where they've gotten to 10 million ARR and then somebody else comes along and does the same thing. And it's like, sort of game over.

• 7:08Jason Calacanis?

  Yeah.

• 7:08Speaker 02

  And that never used to happen. So that's, that's sort of the other thing that everyone's thinking about. So we've been looking at a lot of infrastructure rather than apps.

• 7:18Jason Calacanis?

  So you're going one layer down the stack essentially to prevent from being vibe-coded out of existence?

• 7:23Speaker 02

  Exactly, exactly. We've been looking at more hardware than ever. We didn't used to look at so much hardware. Now we look at a lot of hardware for the same reason. So, so I don't know. I think in some, some ways that nothing has changed, but everything has changed, right? Still looking at the same fundamentals, customer acquisition is important. But, you know, how like, how are you going to kind of maintain your position?

• 7:48Jason Calacanis?

  Do you pay more attention to, to churn than you did before? It's always been a very important thing, especially in the SaaS era. People wanted to type, you know, net positive retention and so forth. But if someone can show up to your 10 million ARR business and crush it, is churn now even more important at the earlier stages of vetting a startup?

• 8:05Speaker 02

  Yes and no. So there have been some high-flying marquee companies, and I won't name names, but we all know them in the sort of vibe coding space that have had awful churn numbers and a lot, and some VCs have been passed because of that. But I think one of the things that will change is as the AI models get better, and that's what everyone is riding on, then they will ride that wave to getting more accurate and being a better product. And that will actually help your churn. So, so there are some things you can control and other things that I think, you know, the LLMs will control and, and make your product better over time.

• 8:38Jason Calacanis?

  Are you referring to like, hateable and Zeblot?

• 8:42Speaker 02

  Yeah, yeah, maybe.

• 8:44Jason Calacanis?

  Well, you know, I kind of think we've seen this before. People did do a lot of sampling, you know, in mobile. When the PC came out, there was a lot of sampling. People would do it as a hobby. They would go to CompUSA and buy a bunch of packaged software. Internet comes out, people would, you know, pay for websites. Apps came out, people would pay for a flashlight app. So there's a lot of sampling coming out, but it will come out in the, I think, in the end. The thing that I think is also pretty tremendous is the ability for founders to get better at the job of being a founder by learning new skills very quickly. So if you were a founder, you didn't quite understand the legal issues, or maybe you didn't understand cap table issues, or you weren't good at

• 9:28Jason Calacanis?

  go-to-market strategy, you sucked at design, whatever you sucked at, you will suck a lot less instantly. And then you might even become good at it quickly. And then if you can be good at, you know, the dozens of things it takes to do the chores at a startup, man, that's a big breakout, yeah?

• 9:47Speaker 02

  A hundred percent. And anybody, and so that means that everyone's bar is higher. Like, everyone has to level up, and anybody who is not, then it's just going to get harder to get funding.

• 9:58Jason Calacanis?

  Yeah, everybody became a superhero overnight. It was like somebody got the serum and everybody becomes a mutant and has crazy abilities. So it doesn't matter if you used to be a mutant, now everybody is.

• 10:10Speaker 02

  But I don't know if you're seeing this, Jason. There is a bit of a bifurcation. Like, when we see startups, like, there are some people who are just exceptional and using all the tools well. And then there are people who still haven't really gotten the memo, whether it's for coding, or whether it's for, you know, general business ops, or sales and marketing. Like, there are a lot of people who have not leveled up. So that, that playing field is changing as well.

• 10:34Jason Calacanis?

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• 11:14Jason Calacanis?

  who use Sentry to move faster. Check them out at S E N T R Y dot I O slash twist and use the code TWIST for $240 in Sentry credits.

• 11:27Speaker 01

  Is that founders that are seeking their first check from your fund? Or are you thinking about companies that are more like Series B, Series C and aren't evolving to meet the moment?

• 11:36Speaker 02

  Both. So we have definitely had conversations within our existing portfolio where the companies are further along. They've got a built-out team. And then now it's like, okay, we're kind of in this weird dichotomy where maybe some of their existing engineers are not going to make it. And that's, that's actually really tough. And then there's also this dichotomy of, okay, I have these people, but now who do I hire next? Do I hire someone? Do I have to kind of change what this person's doing? So actually, in some ways, it's a little bit trickier, I think, to be an existing startup with all of this sort of legacy stuff. And now you're changing versus, oh, I'm starting from scratch as a one-person shop.

• 12:14Jason Calacanis?

  Yeah, this is what we're seeing at the big companies, too. You know, if you had an overhang of middle management or too many PMs, product managers, you're kind of like, well, product management was a lot of note-taking and like,

• 12:27Speaker 02

  Yeah. And now it's not.

• 12:29Jason Calacanis?

  We just talked about Claude. Like, you don't need a note-taker. You just get, literally, you spend $100 on a Claude and you're done. Like, we're here, folks. So that note-taking role, or just every day checking in on the changes, that is kind of over. And if you're a founder who doesn't embrace this, You're at risk. It would be like being the founder who doesn't embrace cloud computing during that change, or you didn't embrace mobile. So just pause for a second, right, Elizabeth? And think about our friends who had an incredible website. They never figured out mobile. They had an incredible, you know, business for SaaS or whatever, but they never figured out cloud, you know, and like Dropbox had to make that change, right? Like, okay, we're not going to

• 13:12Jason Calacanis?

  stand up our own servers. We're going to use storage. We have to put more money into the application level, yada, yada. All right. Lots more on the docket. Let's get to work.

• 13:19Speaker 01

  All right. So the biggest startup story of the last couple of days has to deal with a company called Delve. Now, if you don't know about SOC 2 compliance and other bits of enterprise, Arcana, this is a little bit esoteric to you, Jason, but the issue is, did a company, did a startup that was backed by both YC and some major VCs, essentially cooked their entire business out of thin air? As in, did they do some fraud? So we're going to bring on a founder, Ryan Mahdavi. He's the founder and CEO from Seal, which is from Launch Accelerator cohort number 35, Jason. And Seal does automated compliance, very similar to what Delve claimed to do. Ryan, welcome to the show.

• 13:56Speaker 03

  Thanks for having me. Good to see you guys.

• 13:57Jason Calacanis?

  Yeah, Ryan doesn't have an axe to grind here. This is your straight up heads up competitor. This story is crazy. And there's also like Vanta, which came before this. So this is a pretty wide space. And they came in with the concept, Alex, of disrupting the Vantas of the world and using AI to make this go faster. Yeah?

• 14:20Speaker 01

  Absolutely. The idea was to bring AI and automation to a very boring process. Compliance is kind of like doing your personal taxes. Like, you have to do it, but everyone absolutely hates it. And it always involves more paperwork than you think. So why not use tools to go faster? Well, if you fake it, you can go really, really fast. So Ryan, I want to start with just a very broad point here. You've seen all the materials. You've seen the substacks and the leaks and so forth. How credible are the allegations against Delve from your professional standpoint?

• 14:48Jason Calacanis?

  And what are they? Let's explain to the audience what the actual granular accusations are, if you have them there, right?

• 14:55Speaker 03

  Yeah, yeah, yeah. There is a lot to unpack there. It's Quite in depth. I wanted to start off by saying that this is a very genuinely unfortunate situation, not just for Dell's customers, but the entire industry that effectively runs on trust. That said, whoever put this investigation piece together, bravo. The level of forensic detail is impeccable. And like I said, there's a lot to unpack there. We'll try to do the TLDR for the audience. But I'm curious whether you guys think this is a disgruntled customer or a coordinated hit piece. Either way, these are very serious allegations, which if proven will likely have criminal implications. So on a high level, now there was an incident that happened, right? This incident happened in December. There was some leakage.

• 15:37Speaker 03

  Since then, the biggest problem here is 500 boilerplate reports, same errors, logos just simply swapped. Of those 259 type two reports, which is effectively the more rigorous version of SOC 2, zero auditor findings across every single client, which is almost statistically impossible. And this has affected, you know, brands like lovable bland, clearly, and in Duo's Edge, which is a public company.

• 16:05Speaker 03

  And of course, subsequently, they had that super base bucket leak, which publicly exposed background checks, Stripe tokens. I mean, it's getting messy. So that's the latest and keep in mind, we're at part one. Part two is set to drop this week, which, you know, we're all unfortunately grabbing our popcorn for. But this is what's happened at a high level.

• 16:24Jason Calacanis?

  Okay. So Alex, just to step back there, somebody released these allegations in a sub stack anonymously. Am I correct?

• 16:30Speaker 01

  Yes, they went by DeepDelver. There was a leak of customer information. The company said that's all fake. They went through the linked information and said, hey, this looks incredibly fishy. You know, copied errors across different documents from different companies, a web of auditors that appeared to be, I would say less than above board, if you will. And as Ryan mentioned, just a lot of indication that these were not personalized reports that indicated how a company actually did, but were instead essentially compliance theater. Ryan, what do you think about it?

• 17:00Jason Calacanis?

  So there was a leak of data. And then somebody did a Substack based on that leak? Or the Substack is the leak? Just so I'm clear.

• 17:09Speaker 03

  It's hard to say because the leak definitely exposed a lot of information, but there's so much detail here that and that's the piece where it's like, there has to be a collaborative effort. It seems like that leak alone doesn't necessarily paint the whole picture. Like there's, it's very, very detailed. I mean, you know, look, we, you know, see this as a broader problem than just Delve. We can get into the details of specifically how this goes into Delve. But there's a difference between hustling and faking it. And to be fair, there's a lot of overpromising and hyper cross support in this space and maybe AI in general. But 500 boilerplate reports, nearly half of which are basically identical. Zero incidents. It's, you know, this is not cutting corners.

• 17:54Speaker 03

  It proven true. This is the no gaming system.

• 17:56Jason Calacanis?

  Yeah, it's pretty clear from what we saw in it that they, if it's true, because this is all allegedly, if, if this is true and they did those reports and they just changed the logo on them and it's like AI slop or it's cut and pasted, that would be, you know, like definitionally fraud. And you could have gotten your customers into trouble with their customers. So there's like lots of second order impact here. But somebody leaked this. Was it an internal whistleblower? Is it a, somebody who is a customer of Delve's? Those are all the questions. But there is an underlying issue here, I think, Elizabeth, that you and I deal with.

• 18:40Jason Calacanis?

  The area of Y Combinator specifically. And, you know, startups generally can attract hackers. In fact, Elizabeth, on the application for YC, they asked this very specific question, which is like, tell us sometime you hacked something. And when Paul Graham talks about, you know, Sam Altman, he was like, oh my God, he was such a hustler, a hacker, you know, got through all these things. There is a hacker culture, white hat, black hat, gray hat in between. So I guess we have to also think how much of this has to do with the culture of Silicon Valley saying, hey, bend the rules. And where the line is there, Elizabeth?

• 19:24Jason Calacanis?

  So take the audience through what you and I see on the backend when we do diligence, how often you see. People bending reality and how often are they just straight up lying?

• 19:36Speaker 02

  It's really tricky because the audience we attract fundamentally is trying to think out of the box, which may push the envelope and break some rules. And in fact, actually, for some companies, they may literally be breaking the law, but then the laws may change over time, right? So there's also that.

• 19:51Jason Calacanis?

  Airbnb, Uber.

• 19:52Speaker 02

  Yeah, the biggest companies we admire. Yeah, so I think that that's tough. But I think let's take it from the investor perspective. I mean, from our perspective, Jason, like the companies we look at are so early and we don't often know what is happening on the day to day basis. Like, do they actually have auditors? Are these, you know, accredited auditors? We don't know, like candidly speaking. So we're just kind of going based on what the founders say, et cetera. And that is actually what every founder wants, like investors who can move fast and make a decision. So there's going to be some of that. But I think that's also why we need checks and balances in the ecosystem. Journalists who can discover these things. Unfortunately, it seems like the regulatory bodies haven't discovered this yet,

• 20:36Speaker 02

  but I'm sure based on this, they will come in and take a look. But that is why we have these different parties. I don't actually think it's our job as investors to get into the weeds. No one would ever get a check if we were to get into the weeds because you can scrutinize everything ad nauseam. So that's on the investor side. And unfortunately, we like, I think there's just going to be a percentage of every cohort, whether you're YC or whoever, who will end up in a problem like this. And that's sort of the price we pay. But on the founder's side, like I think, how would you have protected yourself if you were a Delve customer? It is really important to ask your vendors, like for, you know, their credentials, like you could ask whether the auditors are accredited, like, you know, show me that proof.

• 21:21Speaker 02

  Of course, they could still make it up. I'm sure there are ways they can fabricate paperwork, but that, you know, helps a little bit. But that's the kind of thing, I do think that founders need to. You know, ask their startup vendors like how they're doing this, et cetera. And to some extent, suss out whether it makes sense.

• 21:41Jason Calacanis?

  Hiring can be its own full-time job. And hey, guess what? I already have a full-time job. I make podcasts and I invest. But when you're running a small company, we both know every hire matters. You don't want to waste any of the seats you have at your company. And the best partner you can have is LinkedIn Hiring Pro. Why? There's a billion people using LinkedIn. All the great talent are there. If you're proud of your work, you build a LinkedIn page and you update it. LinkedIn Hiring Pro is going to streamline and simplify the entire.

• 22:09Speaker 01

  Jason, tell me more about how to find fraud at companies? And what are the red or pink flags that you look for when you're talking to a founder for the first or maybe even third time?

• 22:18Jason Calacanis?

  Yeah, so Elizabeth makes some really good points here. We live in a trust-based environment. Now, there might be some people, you know, who are, you know, in the media or just naive. We think, oh, well, you're an investor in the company. So you're sitting at the office every day and you're listening to the conversations. And then everybody submits your work and you validate it. Like, not how it works. When you're a minority shareholder, under 10%, you have, you know, information rights, which you never call. You rely on the trust of the founder to send you a monthly, quarterly update every six months, whatever it happens to be. We like to get monthly in the early days and quarterly thereafter. So you're relying on them to tell you the truth. But we do diligence.

• 23:02Jason Calacanis?

  And when we do diligence, there are some very simple things. We will ask the founder, has there been any legal action taken against the firm? Has anybody threatened legal action? Have you had an email, a letter sent to you about that, you know, threatening legal action or of a legal nature? So, you know, we really expand it. Now, we're trusting them, you know, to do that. In our accelerator, we take great pains to explain to our founders. And we love a good hacker. We love somebody who can, you know, bend the will of the world to their vision. But we tell people, when you are doing something for a selfish reason, so for your own gain.

• 23:46Jason Calacanis?

  Like, you know, there was an issue where Zenefits was helping people hack their insurance licenses, right? And this was like the big battle at that company and the founder, Conrad Parker, if I got that right, yeah? He got ousted, he did his revenge, shart up Ripple and all this stuff. You know, he made a mistake, he got an SEC fine, he got a slap on the wrist, basically, but he also lost control of his company. In that example, the reason why helping your insurance brokers, in the eyes of the law, cheat on their insurance test or just not take it properly, that was to benefit them. Now, if you're Airbnb and you're saying,

• 24:30Jason Calacanis?

  "Hey, we believe that people should be able to rent a room in their house", that doesn't benefit Airbnb as much as it benefits the person renting the room and the person renting it for having more options. So you have to put it through that lens. Okay, put that aside. Then we also do training, Alex, very specifically around, and Ryan, you went through this, don't ever exaggerate reality. So when you have your customers, like people, I don't know if you've seen this a bunch of times, Elizabeth, they have a slide. These are our customers in pipeline. And we're like, okay, two different things. Customer implies they're paying, user implies free, pipeline means you put them in a database and you sent them an email.

• 25:12Jason Calacanis?

  So put that on three different slides. So we'll train founders to do that. Or they'll say, like, "This is our pipeline or weighted pipeline", all this like weasely language that can unintentionally get you in trouble. I will give you an example. We had a company, they said that they had certain customers, they also said they had certain employees in their deck. They pitched an investor, investor puts 50K in it. Companies not working out, they're not getting information from the company. This angel investor went, called the people who were listed as employees and they said, "I never worked there." Like, "I met the guy, but I never worked there." And then he called the people who they said had pilots and they said, "We never had a pilot.

• 25:57Jason Calacanis?

  We took a meeting with them." He then sent a demand letter saying, "I want my money back or I'm going to the SEC with this." They gave the money back. The holding blew up. The founder was exaggerating slash lying while raising money. When you do those two things at the same time, Alex, you make claims and you raise money. Do you know there's a special term for that that the SEC has?

• 26:18Speaker 01

  Could it be securities fraud, perhaps?

• 26:21Jason Calacanis?

  Correct.

• 26:22Speaker 01

  I've heard of that. People go to jail for that. Prison. That's a serious... Okay, but the line, Jason, between exaggeration and lying, it seems fuzzy based on what I've heard from both you and Elizabeth. Can you boil that down for founders so that way they know?

• 26:39Jason Calacanis?

  Go ahead, Elizabeth. Boil it down, maybe with some practical and examples that you obscure a little bit like I did.

• 26:45Speaker 02

  So this last example that Jason gave is probably the number one way that we ding founders around sort of this fraud thing. Because usually the business is not far enough along such that, you know, they may not even be doing compliance actively at that point when we're investing. So, but the way that we do suss this out is you need to be crystal clear about the state of everything. So if somebody is not actually your customer, like you're talking with them, etc., and you say they're your customer, like, and we find out about that difference, as much as it may be, they may be your customer tomorrow. If they are currently not your customer, we will ding for that because that suggests future behavior in exaggerating in other ways.

• 27:28Speaker 01

  Is that a lethal, is that a lethal infraction? Like, if a company does that in, let's say, one case, would you not fund them based on that alone?

• 27:35Speaker 02

  Yeah, and I've been very upfront and direct with people. It's like, you told me on this slide they're customers. Turns out they're not customers. You're talking with them. And then people usually say something like, well, we're so close. They have the contract in hand. You know, it's not totally out of thin air, but they have the contract in hands very different from they are a customer.

• 27:54Speaker 03

  Yeah. I have a question for you guys. Like you, you guys invest quite broadly and you do this from a diligence standpoint and you have the investor angle much better than us. The way I view it, and I mean, for us was pretty clear, a simple 30 minute demo, I think would have exposed a lot of so-called features that don't even exist. This does not require domain expertise and bringing in someone to do further diligence. So I'm just wondering like, what's the, uh, cause we're not talking about just a seed stage or pre-seed. We're talking about inside partners and $32 million checks being written here. So I'm just curious, like if that changes things for you guys.

• 28:26Jason Calacanis?

  If it was an accelerator that wrote the check, right? You'd be like, okay, it's an accelerator. The product's not even done, whatever. The product's just in market. Hey, you know, uh, and this is like a really good question. Um, you would understand that. Now, how does a big company make this mistake? How does a big company make this mistake? Like, and how did they make the mistake in FTX? As the stakes get higher, the diligence should get deeper. So if you were writing a 25K angel check amongst 20 angels, you know, Elizabeth and I are doing this in the old days. There would be a lead who put in 250 and they would do the diligence, but at the earliest stage, again, back to a trust-based ecosystem that we live in.

• 29:09Jason Calacanis?

  Now you're FTX. Nobody did any diligence? And the reason was that those founders, specifically that founder, I believe, this is what I believe. Uh, and then he went to jail, was found guilty. So the court of law also believed this. I believe he used other people's reputation and the momentum behind crypto to dissuade people from doing diligence and to put pressure on them. So we as investors will deal with this high pressure. Hey, you know, this person's leading, I have this many days. I'm oversubscribed, need the money now, yada, yada, yada. You have to rely on their diligence and then diligence by proxy is the issue here.

• 29:53Jason Calacanis?

  People will say, oh, these other people are in the deal for Delve, for, uh, you know, Theranos. I can use their diligence as a proxy. That's the cardinal sin. People have to do their own and then the founder will come back to you and say, listen, I don't want you calling our customers. They've already been called by this person. And we say, great. Can that person send me their notes? And that's the high level of diligence. So when founders say that to us, hey, we don't want you to talk to the customers. We don't want to burn them out. We're like, okay, that's reasonable. Can you have, you know, Insight Venture Partners, Sequoia, Pear VC, whoever's doing it, Elizabeth Hustle Fund? Can you just share with us the document? And Elizabeth and I have, I think, probably shared this in the past. Yeah, Elizabeth?

• 30:37Speaker 02

  I think so. For some of these really high flying companies, you may not have that opportunity. They may say, you're either in or you're out because I have so many people who want in. And there are so many late stage investors now that you either want to be in this and just take a risk that, okay, the traction's amazing. Let's go. Or, or you say, okay, I'm out. And the late stage investors don't want to miss out because there are very few deals that will really make their fund.

• 31:05Jason Calacanis?

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• 31:47Jason Calacanis?

  Plus you're going to get all sorts of free tools and resources from step to step guides, compliance reminders and an online account. That's going to keep everything organized even as your business grows. So you get all the advantages of a Delaware C corp, regardless of where in the U.S. You are operating out of Northwest registered agent.com slash twist.

• 32:07Speaker 01

  Okay, so that's the generalist non domain expert take on this. Ryan, you are a domain expert. How early did you think there was an issue over at Delve?

• 32:17Speaker 03

  I mean, we saw the signs like six months ago. And look, we haven't gone in and I'm actually curious. I want to go back to this point. We haven't spent a lot of money on marketing. I would say basically nothing on marketing. It's all been referrals and inbounds and focusing on the product itself. So that said, obviously we're in the industry. We're talking to other founders. We're seeing customers. I mean, over half of our customers came from incumbent players like Vanta, Drata, et cetera. We started to see like both claims are fine. Marketing stuff is fine. Everyone's kind of, you know, over posturing and doing whatever they need to do to be competitive. But it, I'm telling you, it was like five or 10 minutes into seeing the platform and saying like, we were actually joking around like this is screenshot native rather than AI native.

• 33:02Speaker 03

  And you don't even have to be an expert. Like you could just say, hey, these are the features you say you have. Where are they? Show them to me. I legitimately think a 10 to 30 minutes demo with anyone who has a baseline understanding of tech would, would probably catch this. Now, for me, I'm always also skeptical when a company's early growth tactics consists of dishing out donuts and doormats, you know, and then just going extremely heavy on growth tactics. So I don't know if that's a red flag for you guys very early on. I understand aggressive.

• 33:32Jason Calacanis?

  There they were sending donuts to people to get them on a exploratory call for their product.

• 33:38Speaker 03

  Yeah, these were what was considered growth hacks, right? Which I mean, I can dish you guys out some donuts and doormats today. I don't know. Are you going to cut me $39?

• 33:48Jason Calacanis?

  I don't understand that hack. I understand the send a pizza. Can we do a call? We'll send a pizza.

• 33:52Speaker 03

  Yeah, yeah. It's like a branded doormat for their offices or prospective clients, you know, offices, something of that nature.

• 33:58Jason Calacanis?

  I have seen those techniques from sales departments. They started in the pharmaceutical industry where what they would do is they They would call the nurses station and they'd say, hey, would you guys, we're going to be coming over from Pfizer. We wanted to buy the nurses lunch. You guys want, you know, Italian, or you want Chinese, or you want Mexican? And they'd say, whatever. And they spend 200 bucks bringing some food, or, you know, in the morning, some donuts. And then they would come and give them samples and talk to them about the drug. Totally fine. That uses the effect of reciprocity. I give you something, you give me back your time. It's not, there's nothing illegal about it. There's nothing untarted about it.

• 34:38Jason Calacanis?

  But if you're spending too much on that and not enough on the product, that would be where you'd have breakage.

• 34:44Speaker 01

  So Dell went around as if handing out donuts to different people, Jason, and also they use them per the Substack report as a way to smooth over things. The report says when clients ask hard questions, Dell dodges, they demand calls where founders charm, promise, and name drop. And when that fails, donuts arrive. So it appears to be a donuts on the front end and donuts on the back end strategy.

• 35:03Jason Calacanis?

  Well, Elizabeth, did you notice that they used, they used other brands? So this brand washing strategy is what a lot of criminals use. A lot of the most notorious, there was that movie with Leonardo DiCaprio, Catch Me If You Can. And he was trying to figure out, like, how do I cash a check? There's like this great scene in the movie. And it's like, well, who's the most trusted person in the world? Like, we would, you know, and the most trusted industry. At that time, it was airlines, right? Like Pan America was like, and then pilot for Pan America was like, wow. That's like God coming in and cashing a check. And sure enough, they would cash his check. So that's what happened with FTX.

• 35:44Jason Calacanis?

  They said, hey, we have all these investors and they bought all those celebrities and apparently, allegedly, perhaps, allegedly, allegedly, allegedly. Insert that all over the place, Elizabeth. That, maybe that's what happened here is they were using those names to try to get people to stand down on diligence.

• 36:00Speaker 02

  That may be true. At the same time, there are so many great reputable companies also, you know, using social proof of other brands. So I wouldn't use that as like a bad signal, like, oh, you know, Salesforce is a customer. That's not a bad thing. That's a great thing.

• 36:14Speaker 03

  I think the question is not necessarily the donuts. I think it's like. I mean, Jason, you were here last week, right? Was it last week? I don't know. You guys walk around SF, you see Vanta everywhere.

• 36:26Jason Calacanis?

  Yep.

• 36:26Speaker 03

  Now you see Delve everywhere. Now Vanta has raised something to the tune of half a billion dollars. These guys are in their, what, Series A, 33 million, whatever it was. You guys as investors, is that something that you're happy with? Is that something that raises any red flag? Do you walk around a city and you see stuff very fitting like this?

• 36:45Jason Calacanis?

  I would say.

• 36:45Speaker 03

  All over the place.

• 36:46Jason Calacanis?

  Yeah. So now let's move to Elizabeth and I are on the board of the company, right? And this is another place where things can break down is governance. A lot of folks, including YC, they don't want people, they don't want the investors to have ball control. They would rather see you do smaller rounds. They kind of advise against this. You know, don't have any major investors, don't give anybody a board seat. I think when you raise over $3 million or you've got over a million or 2 million in revenue, you need to have board meetings. Why? There's something at stake here and you will make a mistake and you might flip the car. And you might flip the car unnecessarily because you just don't know how much speed to take on that turn. If we're using Alex, one of your beloved F1 or whatever racing analogies.

• 37:31Jason Calacanis?

  And that's where like a good coach and a good team would inform you like. So if you told me, Ryan, I'm in a board meeting and they're saying, hey, we've got a million dollars in revenue. We have a $4 million ad campaign. I'd say, well, let's slow down one second here. Where do we get our, how do we get to a million in revenue? Like, how many customers are this? Oh, it's 50 times 20K. Great. How do we get those 50? And like, we used email and we got word of mouth and we have an outbound sales team. It's okay. Let's double the spend on the outbound sales team and let's see if that works. Pouring like that kind of gasoline that early seems very dangerous, very dangerous. It is a red flag, but what do you think, Elizabeth? Go ahead.

• 38:11Speaker 02

  That is a red flag, but I would say as a performance marketer, sometimes you can get amazing buys on those billboards. Obviously, depending on the supply and demand situation, and I don't keep a pulse on that. But I'm not critical immediately if one of my companies wants to take out a billboard. I don't know what, but I think like understanding how much are you paying? And how much you getting out of it is is something that I think

• 38:31Jason Calacanis?

  Which is what a board does, right, Elizabeth?

• 38:33Speaker 02

  Yeah, exactly.

• 38:33Jason Calacanis?

  You've taken board seats before, I assume.

• 38:35Speaker 02

  But I imagine they would have a board.

• 38:38Jason Calacanis?

  You would think they had a board at thirty. Somebody will check that right now. A Series A, almost always, somebody joins the board. What we do in our firm is we say, if we have over five or 10%, we want a board observer or board seat. We're not going to take it because we can't possibly take in all those. But we tell the founders, like Ryan, we probably had this conversation with you. And your attorneys might have said like, why are you giving the board seat this early? And we say, no, no, it's an option to have one. And it's only if we have like a certain large amount of

• 39:09Jason Calacanis?

  a large amount of equity and you want us engaged. You you want your large investors engaged unless

• 39:16Jason Calacanis?

  you pick the wrong investors or you're doing something where, you know, oversight would be not good. And this is where the whole industry has fallen down with governance. And it's because in the early days, too many founders got ousted from their own companies. And then the pendulum swung to, hey, founders get hundred to one shares. You know, at the seed round and that that was like maybe six months of that nonsense. But yeah, that would be where a board would come in and review spending and have a budget and a plan. And accountability, so the CMO would say, yeah, we're going to do this $4 million thing. It's going to generate $12 million in pipeline. We are closing 50% now. Even if we close just 33%, it's going to break even and that's what we want to do.

• 39:59Speaker 03

  Yeah, I guess the argument there is like with tech being so commoditized is is distribution. Something that people are going to start spending more heavily on. I think this is something you guys brought up earlier as well. So to some degree justified, on the other hand, it's like, what are we competing on? Is this like marketing agency with a software layer?

• 40:18Speaker 03

  And of course, that leaves room for us smaller players to to compete because usually they're falling behind. There's marginal differentiators between different companies. I guess it's a balancing act of of how to do that, right? So.

• 40:30Speaker 01

  It's interesting how many things can be high trust and low trust and good and bad. Because if you think about the billboard point that Elizabeth made, Twilio's billboards are like historic. milestones, you know, truly ask your developer. And then if you think about C three dot AI, they had tons of billboards and that company is an absolute dumpster fire. They, you know, Dell have used a lot of IRL advertising, not so good. But then again, Brex did the same thing because they leveraged the arbitrage that Elizabeth was mentioning. It's amazing how many things are just not exactly black and white in this case, and it really boils down.

• 40:58Jason Calacanis?

  Context matters.

• 40:59Speaker 01

  Rust.

• 41:00Speaker 03

  Hundred percent.

• 41:01Jason Calacanis?

  And you know where context comes from adult supervision? I'm going to sound like a grandpa here. I'm going to sound like Uncle Jay Gal. But there's a reason why, you know, we have a structure in America that made us the most competitive entrepreneurial force in the history of the universe. Not since the Greeks has there been so much innovation. And, you know, listen, us Greeks, you know, it's just in our blood, but.

• 41:26Speaker 03

  And then Persians.

• 41:27Jason Calacanis?

  Persians as well, which are, you know, kind of the Greeks, you know, kind of expanded from the Greek peninsula all the way down.

• 41:35Jason Calacanis?

  We share a lot of blood, the Greeks and the Persians.

• 41:39Jason Calacanis?

  We claim everything to the Greeks.

• 41:40Speaker 03

  Yes.

• 41:40Jason Calacanis?

  We believe everything came from Greece, went to Turkey and Italy, Roman Empire came from the Greek Empire. That's our story.

• 41:47Speaker 01

  We're sticking to it.

• 41:48Jason Calacanis?

  We believe, we're sticking to it.

• 41:51Jason Calacanis?

  But, you know, if we were looking at this, just first principles,

• 41:58Jason Calacanis?

  you need to have some adult supervision in the corporate structure in America, which is why when you file as a Delaware corp, they have in your charter, board meetings, board members, you know, reports, audits, whatever. You have to define these things and that's what you work with your attorney on. Hey, we're going to define how many board meetings we're supposed to have. Do we have them or not? These rules came out because of previous lawsuits, previous issues in the marketplace. So the fact that they're bubbling up again is because sometimes in a hype cycle, which we are in peak hype cycle right now, people let their guard down because they're greedy. So the greed index is off the charts right now. The fear index is very low.

• 42:41Jason Calacanis?

  After 2008, fear index all time high and, you know, greed index very low. And that just keeps happening back and forth, back and forth. And you get weird behaviors during this. But Ryan, just to wrap up here, your company uses AI and tools to automate this. But explain why we can trust CL. When Delve, maybe we shouldn't. How do you make sure that your AI is not producing slop or making errors? And how should customers look at CL, Vanta, whoever they choose to use to make sure that the product is good and is tight?

• 43:20Speaker 03

  Yeah, great question. I think, look, everyone is shitting on Delve now because they basically got accused of doing something that's fundamentally wrong. The idea was great. I mean, it's something similar that we're doing. We want to make it easy. SOC 2 is not a one size fits all. These guys have a chokehold on the market. And look, you know, board meetings and meeting minutes for two-person startup, and you guys just talked about it, we're going to see companies that are going to be sub-five people doing potentially billions of dollars in revenue. If we're not headed there already, it doesn't make sense. There needs to be changes. There's a huge need for this. So we have AI tools that help. We make sure that art rails are in place. We're not cutting any corners. So you have to be competitive on the marketing

• 44:03Speaker 03

  side, but you have to deliver. So people come to us and they're often a little bit disgruntled, like, why is this taking so long? This is taking longer than what we expected. And we were promised XYZ. Well, this is the perfect opportunity. So we have a huge influx of people already reaching out. And we're going to take this one step at a time and not create a leaky bucket like they did because it's going to backfire on you. So for anyone affected, please feel free to reach out to me directly. It's [email protected].

• 44:29Jason Calacanis?

  That's my guy. That's my guy, Ryan. That's one of the great marketers.

• 44:33Speaker 03

  Take care of you.

• 44:34Speaker 01

  That's my segue.

• 44:36Speaker 03

  I haven't even started yet. Wait till they give me more money. I'm going to have posters all over the place.

• 44:40Jason Calacanis?

  Here's what you have to do. Remember, if we give you the first money, you have to prove a second person can give you money, and then we'll come in after them. That's how the game works. We can't be the never-ending source of revenue. Although I have done that a dozen times in startups. It never works out well. You need founders to be able to raise money. All right. Great job, Brian. We'll drop you off. Good to see you. Everybody go to seal.io. I O. Seal.io. C E E L. We have our syndicate. We like to share deals we're doing. So, you know, we're going to interview a company here that we're considering for our syndicate.

• 45:19Jason Calacanis?

  And would love to have you, yeah, give some thoughts. You're awesome and you can evaluate companies. So let's have our next founder on.

• 45:28Speaker 01

  Yeah, all right. Coming up next is Seb Shang, the founder and CEO of Brick. Jason, I love this company because we're talking endlessly about power consumption and how to make the overall grid more stable as we add data centers. Well, the idea behind Brick is bringing a piece of technology into a building or a data center, plugging it into key systems and letting it learn about how that building or data center uses energy to save up to 15, 30%. Seb, I think you told me.

• 45:54Speaker 04

  Right, up to 35%.

• 45:55Speaker 01

  Which is an enormous amount of energy, an enormous amount of money. And if this works the way seven company think it's going to, well, maybe our grid won't collapse by the time OpenAI finishes Project Stargate. Welcome to the show.

• 46:05Speaker 04

  Awesome. Thanks, Jason, Alex. Obviously a pleasure to be on. Look, Brick is a AI-native anti-tech company. What that effectively means is we are effectively building an energy-saving agent that, as Alex mentioned, puts all these energy-consuming systems from our everyday HVAC systems to industrial level chillers or heat pumps on autopilot.

• 46:29Speaker 04

  We all have that silly thermal step in our everyday household. Doesn't work, makes tons of mistakes. Obviously, Klaub are of latest. We all have probably come across Andrew Parthi's podcast. All these new smart home optimization leveraging these new tools. Once, you know, that bot as such can find every single device on their local network, things can be automated. But really, in the enterprise world, things are much more complex. So what we do is we have a hardware piece that gets connected to these complex systems in reference and effectively build a software, learning the data, everything from system data to environmental data to power data, training this AI agent, which, again, we all know is overused notion nowadays.

• 47:13Speaker 04

  But we have an AI agent that does real work in our case scenario. Coming up with these all these energy saving rules slash strategies, introducing temperature thresholds, pre cooling, pre heating based on power prices, well, power prices, so on and so forth. And the end result, as Alex you alluded to, fifteen to twenty percent in energy savings on average, up to thirty five percent, and decarbonization is just a natural byproduct of such. So that's really the twenty thousand foot.

• 47:40Speaker 01

  Sub, just to go one level deeper, tell us more about the the hardware device that you have to bring onsite and then also move past the the temperature element of this and tell me about data centers. Because I think everyone is freaking out about how we're going to fuel essentially our AI revolution.

• 47:54Speaker 04

  At the end of the day, you know, look, there are different type of devices here. As we all know, right, the underlying principle being garbage and garbage. You know, this agent does not only need system data, but environmental data, power data. What we have perpetually internally at BRIC is a universal gateway. So think of this universal gateway devices, this black box size of this with of this. It gets connected to a master unit of HVAC system. Again, silly notion of master, you know, slave type notions kind of within the HVAC world. But effectively, what that means is the master unit is already connected to these slave units. So very much via a one to many relationship. Simple gateway gets connected to the master unit will be able to cover the entire building. So all of a sudden, you have a twenty five hundred dollar device that can cover the entire building footprint that gets all the system data.

• 48:40Speaker 04

  From there, like we discussed, right, whether it's a data center, commercial office building, hotel, we effectively are getting the needy, needy, needy, greedy data such as coil temperature, fluid refrigeration. So all of a sudden, we are not just controlling things via on and off. That we are, we're, we're doing much kind of deeper level analytics. In terms of the data center, still, guys think as, as, as follows, it is getting oversaturated. It is overcrowded space in terms of development, in terms of solutions providers. It's just another data aggregation platform. So it's another dashboard plate. What we need is taking the relevant data set from the existing operating system, in this case, the DCIM, be able to drive intelligent decision making on top of it. So.

• 49:18Jason Calacanis?

  So you have a hardware device connects to the system. You get AI to analyze it and then give actionable, real time decisions.

• 49:28Jason Calacanis?

  That will save money. Who are the customers? And how do they pay for it? Are you charging for by square feet? Are you charging for the number of HVAC units? Are you charging by outcomes, a percentage of what's saved? How do you think about pricing this product? And Elizabeth, I'm sure you have some questions. Hopefully, I didn't steal yours, but we always like to know the business model as investors.

• 49:50Speaker 04

  Quick question, Jason. The end outcome being it's all tied to the actual energy savings we can generate for clients. So it's a rapture of energy saving as the core of the business model. We certainly have two bifurcated payment models that we work with clients, which are commercial and industrial. So again, taking a step back, we engage with commercial office buildings essentially managed to hotels. On the industrial side of things, obviously, we have our internal packing order. But for industrial, it's really working with industrial manufacturing clients such as Lucid Motors. Tesla will be next in line with we've been we've been pushing for a lot of the, you know, kind of a sales motion and conversations on the front end to the data centers on the industrial too.

• 50:32Jason Calacanis?

  And who are the current customers? You have current customers using it?

• 50:35Speaker 04

  So we've worked with the likes of JRL on the commercial real estate side of things to hotels, DoubleTree Hilton, to Sheraton Grant for data centers, DTCT, Inspur, as well as industrial manufacturing such as Lucid.

• 50:47Jason Calacanis?

  So you said worked with. Are you currently working with all those? Just to be clear, or are there previous like one-off engagements?

• 50:53Speaker 04

  They're all existing customers to brick.

• 50:55Jason Calacanis?

  Okay, great. Just wanted to parse that language. You can see Elizabeth and I were just talking on a previous segment about making sure we have that dialed in. Your your questions, Elizabeth?

• 51:04Speaker 02

  Just to understand where you are life stage wise, like where are you? It sounds like you're pretty far along and you have a lot of customers. Like, how much are they typically paying you?

• 51:14Speaker 04

  We're still very much early stage. So, look, we, you know, the company was formally incorporated back in March 24. So over the past two years, really, the year and a half timeframe is is on the our actual product development, R and D side of things. We kick off commercialization just about a month ago. So within the past a month, right now, our AR at this stage is about four hundred fifty live AR to four hundred contracted AR. The difference in that definition being the contractor AR, the folks have signed the contract, but yet the full deployment hasn't started. That's the key distinction.

• 51:50Speaker 02

  And what does it take to do a full deployment? Because it seems like the hard part is getting these brand names, which you have, and they have many buildings.

• 51:59Speaker 04

  Exactly right. So at the end, it's a portfolio play, right? We obviously have to land expand in a sector that's relatively stale, slow moving. It's not only about, you know, adhering to continuous of a direct DTC type of sales motion. It's actually working with the channel partners, which can be the HVAC OEMs, which can be, you know, energy efficiency, existing energy efficiency players that are already plugging to these environments that need more of a smarter controller on top of their existing offering. So, look, for us, at the end of the ACV, on average, will stand at minimum for thirty to fifty thousand dollars per facility. On average, for each client, we'll be working with at least two to three facilities as starter.

• 52:39Speaker 02

  Yeah, I think very directly, I've seen a number of companies do this exact same thing, and everybody seems to get stuck around the same thing. Like, the big logos are willing to kind of try or talk with you or whatever, but then somehow there's this hurdle of how do you get JLL to roll this out to all of their buildings? And so I think that's, that's really what my question is. Like, you're suggesting you have to go through another third party to get this onboarding? Or how do you get everyone to move faster or prioritize this? Or is this candidly not a priority because they're swimming in money and they don't actually care about saving that much?

• 53:13Speaker 04

  Good question. Let's, I mean, here are the two aspects of the, of the, of the fact of the matter on hand, right? On one hand, like you said, slow-moving counterparts we're working with, they have been approached by tens or twenty dozens of these energy efficiency players. Really, the existing barrier to entry is always boiled down to two things. It takes extremely long to get a deployment started, and it takes a lot of money to get deployment started. So it's always going to keep boiling down to the time and cost of the equation. And for us, because of the hardware capability that we have, effectively, all of a sudden, you have all two thousand to twenty-five hundred dollar device that can help in tackling problem. And that deployment timeline is exactly the four to six week pilot. That can prove the ROI right outside of their timeframe.

• 53:55Speaker 04

  And we extrapolate that to determine the actual pricing point of our ACV. That's how it works. So all of a sudden, again, you know, the other beauty thing with our underlying software model, it's the scalable nature of it. Uh, we have a foundation model for each of the sectors that we tackle. So all of a sudden you have an agent that can repeat, rinse and repeat for a second or third building underlying the same sector.

• 54:17Jason Calacanis?

  Lightning round. How long have you been working on the company for? When were you incorporated? When did you have your first customer?

• 54:23Speaker 04

  March 24. We had our first customer, paying customer, not just paid a customer, paying first paying customer in July 2025.

• 54:31Jason Calacanis?

  Perfect. So two-year-old startup. How many people work at it? Where are you based?

• 54:36Speaker 04

  We have four full-time employees and two part-time. And we are based in SF.

• 54:41Jason Calacanis?

  Have you gone through any of the accelerators yet? Have you, uh, raised capital before? Tell us a little bit about the history of the company.

• 54:48Speaker 04

  Yeah, so, you know, obviously great to walking through this current round with you guys, uh, as we're wrapping our second capital raise, which is the pre-seed round that we have. So we only have one part of capital raise, uh, which is the accelerator rate around that we did with Forum Ventures and Rysik.

• 55:04Jason Calacanis?

  Forum Ventures has an accelerator in San Francisco. Awesome to know. Uh, we'll make a note of that so we can, uh, trade deal flow. And what makes you, last question, uniquely qualified to pursue this vision for the next decade?

• 55:20Speaker 04

  At the end of the day, it takes a blend of not just technical aptitude, kind of taking a refresh glance on the same problem that's been around two or three decades. Uh, you need the commercial leadership in terms of network and channel partnerships as well as the domain expertise, uh, being deeply embedded in the space that we operate in. You really need to think not just from an operator's standpoint, but also from the building engineers and owners standpoint. Each one of these has different set of incentives underlying. So it's really about getting everybody on the same page, uh, understanding, okay, for building owners, they care more about bottom line, OpEx decrease for building engineers about checking box for technical side of things. And again, you know, it's really the blend of those three things that can make. I'll compete everybody else and really the the rest of the roadmap going forward is about scalability.

• 56:05Jason Calacanis?

  Okay, great. Seb, stay on the line. We've got a little surprise for you. I've been obsessed with Tao and Open Claw for the last 50 days. I've gotten very involved in it. We've got somebody running one of the subnets. A lot of people have been asking me, Alex, about, you know, my tweets this weekend and then just the last couple of weeks of having a lot of subnets and BitTense or topics here on the program. We'll get into that in a moment after we talk to, yeah, here it is. Not financial advice, not financial advice. Family member, what's this Tao you keep talking about on the pod? Me, sell half your BTC and buy some Tao. I don't give financial advice, but maybe to family members, I might give a little bit of advice. Sure, sure.

• 56:46Jason Calacanis?

  And, you know, it'll become apparent why I'm so bullish about Tao and I'll tell you about my specific trades. Right after we have our next guest on and before we have our next guest on, Alex, 30 days of skiing. Look how schveld I look. Elizabeth, you notice I've lost 40 pounds. Thanks for noticing, Elizabeth. Amazing. I didn't do it alone. Ro.co. Get yourself a GLP. If you're so inclined and you want to be fit and you struggle with weight loss like I did for a long time. I used to be a very schveld 166 when I was running marathons. I gained two pounds

• 57:24Jason Calacanis?

  a year while I was married, having kids, building companies. I woke up one day, I was 213. Now I'm a schveld 172 again with a little bit more muscle on my frame. Skiing 30 days, sleeping great, feel awesome. I'm going into my 50s in my dad bod era with 40 pounds less of fat on my body. And I feel great. Did it for my daughters and to stick around a little bit longer. Plus my energy levels twice as much. If you want to check this out, Ro.co because They have an insurance checker. You can just check, hey, does my insurance cover this? They're going to tell you like lickety split if your insurance covers it. And if it doesn't, they've got a lot of options for you that are very affordable.

• 58:05Jason Calacanis?

  Very proud of my association with ro.co. And I think we haven't have a special URL yet, Alex.

• 58:11Speaker 01

  Yes, we do. It's ro.co/twist. Very simple. ro.co/twist.

• 58:17Jason Calacanis?

  Okay. Elizabeth, I don't think you're on a GLP. You've been in incredible shape since I've known you.

• 58:24Speaker 02

  Oh, thank you. Yes. I don't know. I've fallen off the train a little bit, but thank you.

• 58:28Jason Calacanis?

  All right. Well, you know, Alex has been lifting. You know, he likes to wear like a tank top on the show. I banned him from wearing tank tops. He's serious here, but he does have great shoulders and definition. Please don't call the HR department. If you want to be healthier, go to ro.co/twist. All right. So Tau is a crypto project. Have you heard of this, Elizabeth Tau?

• 58:50Speaker 02

  No, I haven't. I'm not really a crypto scenester.

• 58:54Jason Calacanis?

  Neither, neither am I, although, you know, we've made some decent crypto bets in the household. I have been waiting for it all to get more legal and I've been looking for a use case. The basic premise I had, Alex, was like Bitcoin is like this incredible store of value, but they're burning all in the ozone layer, running this crazy network. Doing math proofs for what purpose? To the integrity of the network?

• 59:20Speaker 01

  Sure.

• 59:21Jason Calacanis?

  In a competition, it gets harder and harder to make the next coin. It's brilliant. But we're using a lot of compute. Why? And do we need to use that much compute? Everybody's kind of realized like, hey, maybe the infrastructure here is, could be better utilized. Well, something very important happened on the way to Valhalla, which is the road to Valhalla is we need more data centers. We need more compute. We need more storage. We need more bandwidth. We need more services. Distributed services are more resilient and they grind down the cost of things. What Tau does is it creates subnets. Each of those subnets is run by entrepreneurs.

• 1:00:01Jason Calacanis?

  They then try to use the Tau ecosystem to define tokens and to give rewards. They stake, reward people for doing various projects. What's an example of that? Storage. So I put up some storage in the cloud. I can earn Tau or the subnet's tokens by doing this.

• 1:00:20Jason Calacanis?

  And today, and then there was one language model you may have seen on All In. Chamath brought it up. I didn't even know he was going to bring it up, but he brought it up with Jensen, that they trained a large language model on a distributed compute network. This is the future. We can't have, we can't possibly have enough compute. Tokens are expensive, as you know, Elizabeth. So imagine being able to get storage tokens, bandwidth, or other services over a network that just grinds down the price lower and lower and lower. And we've got somebody with an interesting subnet here. There's 128 of them right now. BitTensor's Covenant 72B.

• 1:00:55Speaker 01

  Joining us now on the show are Gavin Zaentz and Pranav Ramesh. They are the co-founders of Lead Poet, BitTensor subnet number 71. Jason, they met when they were working at NASDAQ and now they're working on this great project that uses BitTensor's economics to help companies find the leads they need to land their next 150 or 500 customers. So Gavin and Pranav.

• 1:01:17Jason Calacanis?

  Gavin, Pranav, welcome to This Week in Startups. Last couple of weeks, I've been talking a little bit about my exposure to BitTensor.

• 1:01:26Jason Calacanis?

  And you heard, maybe heard my description of it. What did I get right in my description? How would you describe this BitTensor moment and why did you join it?

• 1:01:33Speaker 05

  In terms of like how we look at BitTensor, it's really commodifying digital services and products. And what that does is allows you to tap into either a lower price or higher quality output. And that's really why we were gravitated towards the network was to build out sales technology that outperforms all the other products out there.

• 1:01:54Jason Calacanis?

  Now, you had to, Pranav, somehow get one of the 128 subnets. Explain how you get a subnet, how you buy a subnet, how you stake tau to get a subnet. How does it work?

• 1:02:07Speaker 06

  So the way you actually go ahead and buy a subnet is when a subnet becomes available, you need to have a certain amount of tau that's being demanded by the network at that point in time to purchase it. And then you stake the tau to that specific subnet number that you want. And then you receive the subnet and you can start building on it. It's a pretty streamlined process, pretty easy to do, but you need to actually have the tau ready to be able to do that, which a lot of people may not have when they first start getting into the network.

• 1:02:30Jason Calacanis?

  How many do you need? 500 tau, 1,000 tau? Tau's trading at 275 or something right now?

• 1:02:37Speaker 06

  Yeah.

• 1:02:37Jason Calacanis?

  It's pretty volatile, by the way. It was 205 last week. It was 300. This thing bounces around 10% a day some days.

• 1:02:45Speaker 06

  Yeah. So the amount of tower itself varies as well day by day. It's quite volatile, the amount that's required to buy a subnet. So it could range from 200, it could range to all the way up to 500, 600 tower. It really depends on the day that you're looking at it.

• 1:02:58Jason Calacanis?

  Now, do you give that tower to somebody or is it just to stake and set up your server in your subnet?

• 1:03:04Speaker 06

  Yeah. So it depends on if you're buying that subnet from another person or if it's been deregistered. And now you're just buying a brand new subnet essentially because it's been deregistered deregistered and there's no other owner for it. So if that's the case, then you would just stick and you could receive your tower if you get deregistered back. But if you're buying it from somebody else, you actually have to give them the tower directly and it's a one time. Yep.

• 1:03:27Jason Calacanis?

  And Gavin, are they going to go from 128 to 256 to 1024? What's the plan here for subnet expansion? Is it like the NBA where they do it once every 20 years? Or is it more like, hey, we just have more technical work to do on the infrastructure and then we'll release it. And then who are the gatekeepers who approve it?

• 1:03:46Speaker 05

  The first limit after they kind of opened the gates was 64. That filled out pretty quickly. They upped that then to 128. Once we reached around that level, the the foundation kind of decided, let's focus on quality entering the network before we just start having, you know, 10,000 projects. And, you know, maybe only 100 are good anyway. So let's just, let's get a solid number of good ones in that 128. Then they're going to start to expand the network.

• 1:04:11Jason Calacanis?

  So now you wanted to make marketing tools. So show us what you built. Elizabeth, when you're hearing all this entrepreneurial energy going into these subnets and the tokens, what does it remind you of?

• 1:04:21Speaker 02

  Well, you know, actually it jogged my memory that one of my founders did tell me about this and that is how they are funding their business. They didn't raise that much. And so, but I know nothing about this. So it's very intriguing.

• 1:04:34Speaker 05

  Right now I'm about to do a mock request for Brick. I wanted to get some leads specifically out to him. Obviously, you know, I'll send it over after call, after the call, so you can actually access and take action on these leads. I'm just going to walk you through the Process. So the first thing that we allow users to really start their requests with is their website to pull some criteria of their ICP, some relevant signals. The whole idea of our platform is not giving you a list of 100,000 or 10,000 leads. We want to give you 10 or 100 leads that are actually exhibiting intent and are actually relevant. So first we analyze the website or you can, you know, type in your ICP, which is going to be your customer profile, the exact product or solution you have, and then the signals you're looking for.

• 1:05:18Speaker 05

  After you submit that request, your leads are then loaded in a pipeline, which is pretty much, you know, a Kanban board of a CRM where your new leads are populated in the new lead section. And as you action those leads, they, you can maneuver them to the contacted, responded, you know, did they end up going to a meeting? Are you negotiating with them? Did you win those, those sales or did you lose them? And you're restoring and all that data to actually make the system, um, you know, more smart, know more about your ICP and know really what signals are relevant. So looking at this request that we ran for BRIC, ultimately what came up through the system were companies that really have some solid signals around potentially wanting to leverage his technology,

• 1:06:00Speaker 05

  whether that's that they've committed a lot of funds to actually, you know, a green energy program and being more efficient. Or it may be that they're hiring some new people in that.

• 1:06:13Jason Calacanis?

  How did it come up with this lead? Um, I'm sorry to interrupt, but just, um, it was just done by AI, a human with AI? Who's on the other side of this? A, a, a global group of SDRs?

• 1:06:25Speaker 05

  What the miners are doing is two tasks. So the first task is them sourcing leads, which they have to submit a lead, which is all of these attributes appear, which is the person data and the company data. Um, and then ultimately that's the first part of, of, of the subnet is producing that data. We have about five million leads in the database, all verified to a higher degree than, you know, Apollo's.

• 1:06:48Jason Calacanis?

  So you have a database and then you have these miners. In the case of a miner, they're not mining Bitcoin. Like with a high GPU cluster, they're more like doing mechanical Turk work where they're saying, "Hey, we want to add this lead," and they could be doing it by whatever means they find.

• 1:07:08Speaker 06

  Yeah, exactly. So miners run a variety of different sourcing pipelines to discover and construct leads right now. The most common one that we've seen is they use scrapers. So they're scraping the web, they're scraping company pages, contact pages, company directories to provide us with the lead data that we're looking for. The second most common one, and this was actually the most common one when we started LeadPoet, is using an LLM-based approach. You would plug in a specified prompt, which essentially said, "Give me a thousand leads in the SaaS industry that are located in the US." You'd get the names and you'd get the companies, and then they'd use a suite of APIs to enrich that data.

• 1:07:43Jason Calacanis?

  Got it. So by any means necessary, they get the leads anonymously, put them into the system, and then you have another group of people who verify that it's a good lead? Or just the customer verify it's a good lead? Who verifies that it's not slop?

• 1:07:56Speaker 06

  That's a great question, and we have validators on our network that run the code that we provide that actually do that entire process. And it's not just a single point of validation. We run a consistent point of validation throughout the entire process. For example, the first point is we check whether the email is valid. The second point is we check whether the LinkedIn profile is valid and associated with this lead. The next thing we check is whether the LinkedIn profile is indexed by Google, and if a LinkedIn profile has a low authority, it will not be indexed by Google.

• 1:08:24Jason Calacanis?

  Totally get that. How much tau would the person who puts in 100 leads get?

• 1:08:27Speaker 06

  It varies based on the day and the amount of total leads submitted, but it could be around like $200 to $300 of total.

• 1:08:38Jason Calacanis?

  So $2 a lead?

• 1:08:39Speaker 06

  $2 a lead on certain days, yeah.

• 1:08:41Jason Calacanis?

  All right, so Seb.

• 1:08:42Speaker 02

  So you're paying in tau? Like the...

• 1:08:46Speaker 05

  So technically, it pays out, it pays out in our alpha token, which the underlying is tau. And in terms of the average cost per lead now, it is down to, you know, 3 to 5 cents. When we started, you know, a couple of months ago, it was around the $2, $3 range, but we've really lowered that cost because, you know, BitTensor really pushes prices into that commodity pricing. And, you know, the goal is to continue to push that lower as we've seen more supply enter this, you know, kind of free market for data.

• 1:09:16Speaker 02

  And then you

• 1:09:17Jason Calacanis?

  Do you understand how disruptive this is that like they you don't even know who's putting the leads in right it's just this distributed group of lunatics competing to get the best leads at the lowest price it's like mechanical Turk globally off the rails but you had a second question go ahead Elizabeth

• 1:09:33Speaker 02

  Oh yeah and so just confirming like then you charge your customers in dollars or how do and you're selling packages of that or how does that work

• 1:09:42Speaker 06

  Bingo yeah we we charge our customers in dollars and the miners get compensated who are actually providing the leads in the backend in our alpha which is essentially can be swapped for tell

• 1:09:53Speaker 02

  Mm hmm

• 1:09:53Jason Calacanis?

  It's brilliant what are you currently paying essentially effectively per lead that you bring in and would what lead poet has essentially put together here for you be interesting to break

• 1:10:03Speaker 04

  Our CAC today is effectively zero

• 1:10:06Jason Calacanis?

  Oh

• 1:10:07Speaker 04

  Uh fungales cells right first or second degree of connections getting us in the door we funnel we pass the hardware costs through to the customers now after the 46 week timeframe if we don't deliver any savings no hard feelings we will reimburse our clients back for the money now with that tool we just saw I'll be intrigued you know great job and you guys effectively resurrected my interest in looking at outbound marketing again which I try we pay for it to we pay about $2,000 for a for a trial which didn't really yield any results so on my mind it's really about okay before we even talk about CAC it's lead quality

• 1:10:43Jason Calacanis?

  Right so if they got you a thousand leads that was filled in and it result that would cost a thousand leads at $2 each would be $2,000 you'd spend $2,000 in your average customer scenario if 10 of those leads were qualified and you closed one or two you'd be all in yes Seb

• 1:11:00Speaker 04

  Correct Jason 10 times ROI right after the bet right as little as a $20,000 ACV that's something that's a result we starting to be open to

• 1:11:08Jason Calacanis?

  Yeah. All right. Really interesting. Alex, any final questions there for the team?

• 1:11:13Speaker 01

  Yeah, I'm just curious about capacity and how many leads you can kind of guarantee to people. Because if you're charging for lead poet on a SaaS basis to the end customer and I show up to you and I say, "Hey, you know, I have my 1,000 credits from the accelerate plan and I'm looking for X number of leads in this you know, super niche area and the miners can't find them." How do you kind of square that circle?

• 1:11:33Speaker 05

  There, there's two uses of the credits. There's going to be the high intent leads where 98% of our users, they, they live and die there and that's going to be 10 credits a lead. So the accelerate plan will get you 100 of the high intent or 1,000 of the target fit. But to your point, if we're targeting someone in Antarctica and you know, there's, there's probably not even 1,000 people there. Maybe there are, you know, correct me if I'm wrong.

• 1:11:54Speaker 01

  Penguins, et cetera. Yeah.

• 1:11:55Speaker 05

  Exactly. So, so we're limited by obviously the size of the market where any other, you know, lead providers also limited there. But our whole thing is the higher quality standards to ensure that you're getting the highest quality leads and the leads with the most intent regardless of the market. So you're able to save all the time that you would be, you know, researching, qualifying and, you know, checking if the emails are right, all, all these other tedious tasks.

• 1:12:19Speaker 02

  Are you putting these on malt launch?

• 1:12:23Speaker 05

  No, not, not yet. So the, what, what's coming up, so we just had our product launch last week. So we're, so we had, we had a closed beta since the end of January, had a lot of users join there and got some amazing, you know, early action, but the launches happened last week in terms of the roadmap. We're going to have, you know, autopilot outreach, intent monitoring, also, you know, skills for agents. Obviously that's where the puck's moving. We want to be there and welcome that type of, you know, agentic commerce.

• 1:12:51Jason Calacanis?

  And just so people understand the architecture here, Gavin and Pranav, you have this company as a Delaware C corporation. It's a startup. Have you raised money for it or are you just bootstrapping it now?

• 1:13:06Speaker 05

  So we've raised some initial funding from a fund native to BitTensor, but we are looking to start accelerating.

• 1:13:12Jason Calacanis?

  Who's that Barry Silbert's fund?

• 1:13:15Speaker 05

  No, a fund out of UK, a DSV fund. They've been, they've been really great early partners.

• 1:13:20Jason Calacanis?

  So they gave you cash to own equity in your company?

• 1:13:23Speaker 05

  To own the part of the alpha with, with the subnet. Like, so they helped us get the subnet, which was amazing for us.

• 1:13:29Jason Calacanis?

  So they own part of the subnet, but the corporation, is that where the value will be? Because that's where the revenue is coming into? Or is the value going to be in the subnet token or both?

• 1:13:40Speaker 05

  Definitely both. The way that, that we see it is the subnet is the commodity layer that produces these commodities, you know, whether it's going to be automated research, automated outreach or this lead data. And us as an entity that has, you know, leadpoet.com, we're going to also have to access that backend commodity. And the way that will ultimately will be is through burning that alpha, almost like an API credit in order to actually access that data. So both of them will ultimately, you know, have value here and drive value to each other with a, you know, very synergistic.

• 1:14:13Jason Calacanis?

  See, what I like about this, Elizabeth, which is challenging for us, because we're usually equity holders, is they're building a real company, charging dollars, Alex, to the customers. It just feels like a normal company. Hey, we're Lead Poet. We'll get you leads. Great. Awesome. I'd love to be involved in that. I'll give it a shot. I have a startup. I have an at scale company. Got a small business. If it works, it works. I'm happy. But then how would they get those leads in there is a contest? And it's open to anybody. Anybody can go. Like, let's say you had a job you hated and you worked in sales somewhere. You worked from home. You could have like a second laptop over there. Theoretically, when you're working, you could be just doing lead gen for these dudes

• 1:14:56Jason Calacanis?

  into the system anonymously, pulling out Tau and all the extra capacity in the world. You're not judging it based on somebody in the Philippines versus somebody in India, versus somebody in South America, versus somebody in San Francisco or Arizona.

• 1:15:12Jason Calacanis?

  All of that is abstracted away. Just whoever wants to provide the leads can do so. Whatever technique you want to use, you're a developer and you're scraping, or you're a human who's got a LinkedIn account that's a pro account that your company pays for and you're able to find these things because you're really great at sourcing them. Like, a million different techniques can bloom and the price just goes down. So your cost of goods, Gavin, will just keep getting compressed, which means you could undercut the other people who are hiring people in America to do SDR research for 50 bucks an hour.

• 1:15:45Speaker 05

  Exactly.

• 1:15:46Jason Calacanis?

  That's the disruptive part of this.

• 1:15:48Speaker 05

  100%. And not only undercut, which is something we've looked into in terms of the target, but provide a higher quality standard. Because the validation we have is, you know, it is adversarial with these miners, we've had to build out a system that is likely more robust than any of these providers that are currently, you know, ZoomInfo, Apollo, Rocket Reach. A part of the way they validate their leads is looking at each other. Like, who's really checking this data? It's really funny when you, you know, you look into it. And yeah, this whole idea of like the global competition, like, are you familiar with like ImageNet and that whole, you know?

• 1:16:20Jason Calacanis?

  No, explain to us.

• 1:16:22Speaker 05

  So it's pretty much a global competition around this vision model to see how much it could improve. I think it was, you know, probably a decade ago. And the ability for everyone to compete had this compounding effect where it beat like the top experts in these fields like radiology and a wide array of fields way quicker. And this didn't even have, you know, rewards in it like BitTensor does. BitTensor's not only has that competitive layer, but it also has the reward, which, you know, allows it to compound in the quality even more.

• 1:16:54Speaker 02

  Yeah, every day I tell my open claw that it's gotta go out there and earn its keep in its Mac Mini. So I would love for it to do this job.

• 1:17:02Speaker 05

  Yeah, and Mark actually, you know, that's what he's been using his open claw on and

• 1:17:07Speaker 02

  Yeah.

• 1:17:08Speaker 05

  It's been cool to watch his journey doing this exact thing. Yeah, like, okay, my open claw is idle. Let me have it. Yeah, mine is up. Let's figure out how to

• 1:17:16Speaker 02

  Yeah, no, I think that's a great use. That's why I said about MoltLaunch. The other interesting thing is, right now, there isn't really a good way to get ratings for your AI agent, you know, kind of like on Upwork or Fiverr or any of those. It's a little bit chicken and egg, right? You have to, you have to have credibility to get a job, but you, you know, how are you going to get that without the job? So, so for MoltLaunch or any of these other marketplaces, I would be willing to have my open claw go and do jobs for free to get that, those ratings, because right now, it's on MoltLaunch. It can't find a job because no one will hire it.

• 1:17:49Jason Calacanis?

  I love that. MoltLaunch, did you get to invest in MoltLaunch? Is that like some open source project?

• 1:17:54Speaker 02

  No, we're not, we're not investors. And there are a number of marketplaces that are starting, but I think they have this cold start problem, right? Because none of these agents have any reputation.

• 1:18:03Jason Calacanis?

  No work history.

• 1:18:03Speaker 02

  Yeah, no work history.

• 1:18:05Jason Calacanis?

  They have no LinkedIn page. We're going to need to have them listed properly. All right. A lot of people have been asking me my involvement in the ecosystem. A lot of people are like, oh, my God, are you pumping? Alex, you probably have some questions. Have at it.

• 1:18:19Speaker 01

  Well, I'm just really curious how much Tau you own, because we've talked about your family's Bitcoin investments historically. So what is the, what's the Jason Tau AUM?

• 1:18:29Jason Calacanis?

  So if you go to stillcorecapital.com, S-T-I-L-L-C-O-R-E capital.com, my friend Mark Jeffrey started this. He asked me to be a partner in it. So I seeded this fund with a couple of hundred thousand dollars. They've got a couple of million dollars under management, and it's just a classic fund. What they're doing is, anybody can buy Tau on Coinbase. You can't buy Tau on Robinhood or other places yet. On Coinbase you can. So I got a Coinbase set up. I have probably a half million dollars in Tau I've bought personally.

• 1:19:11Jason Calacanis?

  And then I have a couple of hundred thousand in Stillcore Capital, where I'm a partner. They're working on the subnet. So they might talk to Gavin and Pranav and say, hey, what's the, what's the market cap of your subnet right now, Gavin?

• 1:19:25Speaker 05

  I think it's about like 7 million or so. I mean, there's the fully diluted, but the circulating is, let me pull it up.

• 1:19:33Jason Calacanis?

  So if it was 7 million?

• 1:19:34Speaker 05

  10 million, 10 million.

• 1:19:35Jason Calacanis?

  10 million. We could go in and with Steelcore Capital, ask Gavin to do a trade. We would negotiate a price with them. Hopefully, maybe since we're higher profile, we could say, hey, can we get, you know, a 30% discount will buy $700,000 or $200,000 or $70,000, whatever. So we could own the subnets. Now, to own the subnet tokens requires a wallet. And it's not, the 128 are not on any of the other exchanges, right Gavin?

• 1:20:03Speaker 05

  Yeah, none of the major exchanges. They're on some, you know, let's say tier two, tier three exchanges, but yeah, not Coinbase, not the Kraken.

• 1:20:10Jason Calacanis?

  What would be an example of a tier two or three exchange that has the subnets on them? If people were curious of how to buy your subnet token. Are you on any of them?

• 1:20:20Speaker 05

  No, so for us, we're just targeting the tier ones of when we pursue a listing. But that'll be, you know, Mex Global, I think is one that that has some subnets on it. And I think that's, I think that's the only one so far. But Kraken, they're pretty deep in the ecosystem. Could definitely see them listing them, you know, when the liquidity is there, when the time is right.

• 1:20:40Jason Calacanis?

  So just so people understand how I look at this, the market cap right now, Elizabeth, of Tau, the ecosystem has been 2 to 3 billion dollars. When it's 200, it's basically easy way to do it, back of the envelope math. When it's in the $300 range, it's a 3 billion dollar. And it's in the $200 range for the token, it's 2 billion. I believe that that could become as big as Solana, let's say, or Ethereum. Probably not as big as Bitcoin, because Bitcoin is, you know,

• 1:21:07Speaker 02

  Yeah.

• 1:21:07Jason Calacanis?

  a phenomenon that might only be out once. And you have somebody like Michael Saylor and Mr. buying up all the Bitcoin. I've always said there would be a better Bitcoin and that there would be a better opportunity. I think the game of Bitcoin has ended. And it ended when Michael Saylor got to 3, 4, 5 points of ownership of Bitcoin, Alex. And other corporate interests bought a certain amount. It's not punk rock anymore. It's not, it's a store of value, sure, there's, but now you have USDC and other stores of value that are not volatile, that you can get into. Crypto is now legal. And is becoming organized. I had the SCC Chair and the CFTC Chair on All In, did an interview with them in Chamath. I believe crypto now has been blessed.

• 1:21:51Jason Calacanis?

  The rules of the road are there. So I'm very curious about what happens under that circumstance. Therefore, I think making a bet on a crypto project that is distributed and that solves real world problems like startups, which is my area of expertise and yours as well, Elizabeth. There's something there that could compound to, you know, a $500 billion market cap for, you know, um, Tau, which would be roughly, you know, if it's trading at two or three billion, let's put it at 2.5 billion. That's a 200X from here. That's my base case is I think we could be sitting here and Tau in five to 10 years could go 200X.

• 1:22:34Jason Calacanis?

  Now you say like, well, how does JCal even come up with that number? Just historically, I've seen things of value. When I see entrepreneurs like Gavin and Pranav trying these things across 128, I know it'll be 1024 eventually, if this works. And if it works, it's going to be cloud computing, storage, and my God, you're doing something very creative. Lead gen. It's going to be everything. Everybody's going to try to play one of these games to lower the cost of basic services. That's my bet. The chances of this happening are low. Like 500 billion is a big number, but we've seen it happen before. Therefore, I am fine losing all my money, hundreds of thousands of dollars, close to a million dollars, whatever I want to put in all this. I'm okay losing it. I haven't

• 1:23:19Jason Calacanis?

  put any of my fund money in it, but I would like my fund to track companies like yours, Gavin and Pranav, and buy equity in your parent company if you choose to do that or have you come to our accelerator, whatever. So, anyway, I'm in the learning phase here. I like Alex, place a bet and learn.

• 1:23:37Jason Calacanis?

  Not deliberate forever and then place a bet. Given my experience in life, doing this for a long time, I just go all in. I place a bet, then I figure out, did I make a wise bet? And should I double down or should I get out of the bet? I could always leave, you know, Tao could go down to 100. All the subnets could fail, nobody would make progress and I lose, you know, two thirds of my investment. I'm okay with that.

• 1:24:01Speaker 01

  Yeah.

• 1:24:01Jason Calacanis?

  I'm okay with that.

• 1:24:02Speaker 01

  No crying in the casino.

• 1:24:03Jason Calacanis?

  That's what I was about to say. All right. This has been another amazing episode. Anybody have any closing statements or questions here? Elizabeth, you might have a couple. I don't know.

• 1:24:12Speaker 02

  No, this is very interesting. Actually, I learned a lot in this, so I'll have to check it out. But you know, I've never done well with crypto. I don't, I think I've only lost money, so, so.

• 1:24:21Jason Calacanis?

  Here's what I'll say, Elizabeth. Go, take out your Coinbase account. Look, I don't give investment advice, but what do you like to waste money on, Elizabeth? You waste money on like World of Warcraft, on sneakers? What is your advice that you waste money? You buy dummies? What is your, you buy croissants? What do you, you, what do you go, oh my God, I'm just an idiot for wasting money on this? What is your?

• 1:24:45Speaker 02

  No, I don't know. I'm kind of a cheap person. Probably angel investing, though. I, I wouldn't call it wasting money. It was, they were learning experience.

• 1:24:55Jason Calacanis?

  So here's how I look at it. If that's your addiction and you typically write like a micro check size of five or 10K.

• 1:25:01Speaker 02

  Yeah.

• 1:25:01Jason Calacanis?

  Like, I would look at it in the same exact light. Hey, this is a flyer. I'm going to buy $5,000 worth of Tao. And now I'm watching it every day. Now I'm interested. And if it goes to 2,000, okay, yeah, but it's liquid. So you could probably sell it. It's, you know, it's trades on like startup investments. And if it goes 10X, you could sell your cost basis and then have a free roll.

• 1:25:23Speaker 02

  Yeah, that's true. That's true. I'm also not very good at watching these things, which is also why crypto is not a great investment for me. Because like I've had crypto go all the way up and then come all the way down. It's like, oh shoot, why didn't I sell?

• 1:25:35Jason Calacanis?

  I did this with Open Door. I bought some Open Door when these lunatics were like, oh, we're going to bring everybody back. The bands back together. I was like, great, buy a bunch. I knew what would happen. This was my trading strategy. I bought some and then I said, and I think I bought it at $5 a share, whatever it was. And I said, okay, when it hits $7 a share, sell like 10% of my position. When it hits $8 a share, sell 10%. $9 a share, 10%, 10% sell. I did that, covered like almost my whole cost basis, and then I got the other half for free. So that was like a silly goofy thing to do. But I bought it, yeah, at like $4 a share, right there in September. It went, I knew it would, and then it came right back down.

• 1:26:16Jason Calacanis?

  But now I'm free rolling. If these guys figure it out, great. If not, okay, here we go. So anyway, I don't want to give you advice, but yeah, you should.

• 1:26:24Speaker 02

  I'll check it out.

• 1:26:25Jason Calacanis?

  You should, you should go down the rabbit hole. And so the two themes we'll have for the rest of this year, it's OpenClaw and these agentic technologies and Tao and these crazy entrepreneurs trying to ground costs down. Thanks to all the partners. Thanks for everybody coming on the show. See you next time. Bye bye.